BSP removes budget ceiling for rediscounting facility
MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has removed the budget ceiling for its peso rediscounting facility, ahead of any possible effects of a looming US debt default.
Starting November 15, banks will be allowed to borrow all the money for their short-term needs through the BSP's peso rediscounting facility.
Banks are presently limited to borrowing P20 billion from the facility.
BSP Governor Amando Tetangco said this is part of a "package of measures" they can use to make sure local banks don't run out of money in case a global event freezes the international banking system.
"We have a package of measures that we could consider deploying should there be significant liquidity strains stemming from the challenges that could affect global financial markets and more broadly the global economy. Adjusting the terms of access to the BSP's rediscounting facilities is one such measure," he said.
Such an event occurred in 2009 when Lehman Brothers collapsed, icing over global money flows. The BSP raised its peso rediscounting facility to P60 billion in reaction to that. - ANC